Stock Views on Everest Kanto, PNB, Dishman Pharma

PINC on Everest Kanto - Target Rs 210
PINC Research has maintained its buy rating on Everest Kanto Cylinder with a target of Rs 210 in its October 24, 2008 research report. "Everest Kanto Cylinder Ltd’s (EKC) Q2FY09 results were in line with expectations as it reported a 73% YoY growth in net sales to Rs 2.2 billion on back of volume growth and full quarter contribution from CP Industries. OPM expanded by 72bps to 31.8% while net profits rose by 52% to Rs 432 million."

"The stock trades at an EV/Sales of 1.4x and EV/EBIDTA of 5.2x FY10 estimates. Robust demand for CNG cylinders coupled with growing contribution from lucrative jumbo cylinders business is expected to provide sustained revenue growth and higher margins in the coming quarters. Thus, we maintain our ‘BUY’ recommendation with an 18-month price target of Rs 210," says PINC's research report.

PNB - Target Rs 627

Karvy Stock Broking has recommended a buy rating on Punjab National Bank (PNB) with a target of Rs 627 in its October 21, 2008 research report. "During 2QFY09, we expect the bank would its deposit and advances by 19.5% and 20% (Y/Y) respectively. We estimate NII to grow by 14.8% (Y/Y) to Rs 14.8 billion. At current price the stock quotes at 1.2x adjusted book value FY10, we value the bank at Rs 627 per share at 1.46x ABV FY2010. We rate the stock as a BUY with a target price of Rs 627," says Karvy Stock Broking's research report.

Dishman Pharma - Target Rs 250

Karvy Stock Broking has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target of Rs 250 in its October 29, 2008 research report. "The net revenues for the quarter reported at Rs 2.52 billion with 35.1% y-o-y and 6.8% q-o-q growth rate, against our estimates at Rs 2.43 billion. The net profits for the quarter before exceptional items stood at Rs 339.87 million. The company maintains its guidance of reporting Rs 10500 million revenues in FY09 with 23% to 24% margins at EBITDA level and operational PAT to the tune of Rs.1500mn."

"We maintain our revenue and earnings estimates for FY09E & FY10E. We expect revenues and earnings to grow at a CAGR of 31.4% and 27% from FY08 to FY10E driven primarily from the high margin CRAMS segment. The stock is currently available at P/E of 6.9x on FY10E basis. On account of compressed valuations, we downgrade our PE multiple from 13.1x to 10.5x on FY10E diluted EPS at Rs 23.6 and revise our price target downwards by 24% to Rs 250. We continue to rate the stock as a "BUY," says Karvy Stock Broking's research report.